26 Jul 21

ALD Automotive: “Our funded fleet will grow this year”

In spite of the bleak outlook at the start of the year, the first half of 2021 has turned out to be remarkably positive for ALD Automotive. In an interview, Group Chief Executive Officer Tim Albertsen looks back on the first 6 months and talks about his plans for the future, which include further expansion into Asia.

Rewatch the panel debate with leasing industry executives Tim Albertsen took part in, which was part of the 2021 Global Fleet Conference.

How do you look back at the first six months of this year?

“At the start of 2021, it looked pretty bleak given the context of the pandemic, but we have actually done really well and so has the industry. We did much in 2020 to prepare us to restart the business and to focus in the first half of 21.”

“Most of our large clients are working on electrification but downsizing is not on their agenda. This means consulting has been very busy, transforming into new business opportunities. We see them ordering new cars in large numbers.”

“The biggest problem we have now is we cannot deliver new cars to the extent we want. It looks like microprocessors will start being available in the second half of the year so we should see the funded fleet grow further this year.”

Is economic confidence equally strong in APAC and Latin America?

“Most countries in Latin America haven’t really been in lockdown. In Colombia, for instance, we just reached 4,000 cars which is a very good achievement in a very short time. We also see growth in Brazil and Mexico.”

“In Asia, “lockdown” really means “lockdown.” We just got our Malaysian management team together in October last year. There’s growth but not to the extent we expected because clients cannot go out and visit their customers for the time being but we have lots of dialogue with our international clients and with our partner in the region, Mitsubishi.”

“We hope to continue our expansion in the region later this year and into 2022.”

Last year, there was much talk about the move to flexible mobility. Do you see that happening in real life or are clients still going for full-service leasing?

“Our flex portfolio is growing fast and it appears to be a complement to what we’re doing; it is not replacing the typical company car or LCV that would normally go on a long contract.”

“We won’t be returning to a model where everyone needs to come to the office every day but we are seeing the limits of working from home permanently. People are longing to go back to the office, to interact with colleagues and their leadership. So the concept that we’re not going into the office any longer and we won’t need a car any more, is not what we believe is going to happen.”

“To the contrary, as people are moving out of the cities, we see B2B2E programmes are becoming more popular. More and more of our customers are asking us to supply not only company cars but also mobility as a benefit to employees who had perhaps opted out of the scheme before.”

How is the roll-out of EVs going?

“We’re actually more or less at the level we should be at in 2025. I believe we could move even faster but it will be a challenge to deliver the right charging solutions.”

“Charging will be the biggest challenge in the next couple of years. It’s not just about us, it’s about governments and cities, about big infrastructure projects that have to be funded. We try to play a role in ChargeUp where we have a voice and can talk to the authorities to make sure we’re all taking the right actions.”

Is the uptake of EVs impacting used-car sales of diesel and petrol vehicles?

“At some point, it will have an impact but for the moment, we have good results from used car sales. The cars coming off lease now are typically still diesel cars because they were put on the road in 2016 to 2018, when 80% of our deliveries were still diesel cars. So today we’re selling diesel and petrol cars and very few plug-ins and BEVs.”

“It will be quite a long transformation and there will still be people living in the countryside with no intention of going into cities. We’ve also been repricing our diesel cars to make sure people consider something else, so the residual values are already lower than they used to be.”

“It’s also a social issue. EVs that will come back in three or four years will have an RV that is probably the price of a nice car. A family may not necessarily have €20,000 to buy a car. They might have €10,000, or 6 or €7,000 in Eastern Europe. Families that can’t afford to pay €20,000 for a used car still have a mobility need. What will they buy? A diesel or a petrol car.”

What can your clients expect in terms of digitisation?

“The pandemic has accelerated trends. Used and new car sales have gone digital to a large extent. So clearly if you want to stay relevant, you have to be a digital player.”

“We now have an international digital framework which is the platform we use for Tesla, Polestar, Lynk & Co and we will add another interesting partnership in the Fall, also a full EV and fully digital partner.”

“We are creating a full ecosystem around digitisation that allows our customers and our partners to transact 100% digitally. This is part of Move 2025 and we are quite ahead in the industry.”

“We also want to use data to a much larger extent and create new products and services, both to drive down costs for our customers and to increase profitability. One of the obvious ones is that our insurance company is working with Pay-as-you-drive and Pay-how-you-drive.”

In a recent Smart Mobility Survey, customers said they expect technology companies to deliver an aggregator MaaS app and suppliers expect leasing companies to do this. What’s your take?

“I think they’re both right because it will be a combination of both. To create a multimodality platform you need someone who knows how to run the assets but you also need somebody who knows how to connect the customers with all the services you want to bring – typically, that will be a technology company.”

“We have ALD Move, which we developed together with a big tech company and our clients.”

Photo: Tim Albertsen, Group CEO, ALD Automotive (copyright: ALD Automotive)

Authors: Steven Schoefs & Benjamin Uyttebroeck